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Casual Confusion Continues

Employment Law: 30 May 2020

WorkPac Pty Ltd v Rossato

Last week the Full Federal Court (FCC) handed down its decision in WorkPac Pty Ltd v Rossato [2020] FCAFC 84 which has significant ramifications for worker entitlements.

Background

Between 28 July 2014 and 9 April 2018, Robert Rossato (Rossato) was employed by WorkPac Pty Ltd (WorkPac) under six consecutive contracts, supplying labour to companies within the Glencore Group.

WorkPac applied to the FCC seeking a declaration that Rossato could not make claims with respect to paid annual leave, personal/carer's leave and compassionate leave entitlements under the National Employment Standards (NES) nor the applicable Enterprise Agreement (EA), as he was, in its view, a casual employee within the meaning of the Fair Work Act 2009 (Cth) (Act).

Alternatively, WorkPac sought a further declaration, in the event that the Court found Rossato to not be a casual employee, that it was entitled to restitution of the casual loading which it claimed was included in the hourly rate paid to Rossato.

In terms of the nature of employment, WorkPac claimed Rossato was a casual employee due to the absence of a "firm advance commitment as to the duration of the employee's employment or the days/hours the employee will work.

The FCC's Decision

Contrary to WorkPac's submissions, all members of the FCC found Rossato was not a casual employee for the purposes of the Act or the EA.

The FCC has found that the parties had agreed on employment of indefinite duration which was stable, regular and predictable such that the postulated firm advance commitment was evident in each of his six contracts.

Additionally, all members of the FCC found that WorkPac was not entitled to restitution of the casual loading, as there was no relevant mistake, and no failure of consideration such as would support restitutionary relief.

Significance of the Decision

Classification of Workers

The FCC's decision solidifies the importance of substance over form in respect of drawing the distinction between casual and permanent employment.

Therefore, workers who are employed for an indefinite duration which is stable, regular and predictable are likely to be permanent employees despite a 'casual' contractual relationship.

Consequences for Employers

The FCC's decision in this case serves as a timely reminder to employers to be cautious in classifying their employees as casual.

When looking to implement a casual employment arrangement, employers should ensure:

that the performance of work by said employees is unpredictable, irregular or intermittent; and
employment contracts are carefully drafted to unequivocally categorise casual employees as such.

Additionally, where work performed by casual employees transitions to an arrangement a permanent employee, in substance, employers should ensure that they are correctly remunerating them as such, to mitigate the risk of litigation from employees, as in this case.

For more information please contact Stephen Curtain - 03 8600 6042 or 0417 373 545

With Sam Merrylees